Organization Pays

Now that the spring tax filing season has officially passed (including the extended May 11 due date for many Massachusetts and Rhode Island residents, it's time to move to the next phase of the tax cycle.

I understand many of you are still feeling the pain of the tax filing experience, but now is the time to do things to make sure it is less painful next year. The key is organization. Put the tools and processes in place so you capture the information you need to complete your tax returns next year. This should be an ongoing process. One of the things that makes tax filing scary is the overwhelming amount of information you feel you need to go through. If you do this as the year progresses, by the time you get to next year all you have to do is summarize.

For those of you who are at least moderately technologically competent, an easy, but very effective tool is a software package such as Quicken or Quickbooks. But you have to keep up with it. At a minimum, this should be done on a monthly basis, but weekly is far better. Once you have captured all of your data in this type of program, you are only a few keystrokes away from preparing your tax summary.

If doing it on the computer is not your thing, there is another way. You will need manila folders. They should be labeled with the different types of income and expenses. When you get receipts you should put them in the appropriate folder. Once a month you should total all the receipts by category. By doing this often, it does not build up to the point where you neglect it because it has become too intimidating.

Why should I do this?, you ask. Simple. It's your money. The more organized you are, the less likely it is that you will miss valuable tax deductions. That's the bottom line. Saving tax dollars. Stay organized, ask questions.  Your money matters.